BLOOMBERG HT – RESEARCH
Garanti BBVA announced a net profit of 15.7 billion TL in the first quarter of 2023, above the expectations of 13.1 billion TL.
The bank’s solo net profit in the first quarter of last year was 8.2 billion TL, while its net profit in the previous quarter was 19.90 billion TL.
Garanti Bank achieved a net profit of 15.7 billion TL in the first quarter of 2023, above the market expectation of 13.1 billion TL. The bank had a net profit of TL 58.5 billion in the whole of 2022.
In the January-March period, the bank’s average return on equity was 38.2 percent, while its return on assets was 4.5 percent. The return on equity in the bank was 51 percent at the end of 2022 and the average return on assets was 5.4 percent in the same period. The bank’s total free reserves in the balance sheet are at the level of 8 billion TL.
Capital adequacy ratio (CAR) was 15.9 percent, core CAR was 13.8 percent and CAR including free provisions was 16.5 percent in this quarter.
TL loans and deposits continue to grow
Even though the loan growth rate slowed down compared to the previous quarters due to the regulations, it continues. While TL live loans have grown by 10 percent to reach 520.5 billion TL since the beginning of the year, TL customer deposits have increased by 32 percent to 561.6 billion TL in the same period. The share of TL customer deposits in total deposits is at the level of 54 percent.
Net interest income of the bank, excluding CPI-indexed bond revenues, decreased by 12 percent on a quarterly basis to 13.1 billion TL in this quarter, while net interest income, excluding CPI bond revenues, increased by 21 percent on an annual basis.
While the CPI-indexed bond income of the bank decreased by 64 percent on a quarterly basis, it totaled 5.58 billion TL in the first quarter. In the previous quarter, CPI-indexed bond income was 14.8 billion TL due to high inflation. TÜFEX bonds were appreciated with 35 percent October-October inflation this quarter.
Core net interest margin decreased to 4.4 percent from 5.7 percent in the last quarter. Quarterly decrease in margin stemmed from the price ceiling in TL commercial loans and the corresponding decrease in disbursements.
NPL ratio decreased
While Garanti Bank’s NPL ratio was 2.7 percent at the end of 2022, it decreased to 2.5 percent at the end of March 2023. During this period, the welcome rate slightly decreased from 72 percent to 71 percent. Total provisions reached 41.2 billion TL.
It is seen that strong fees and commissions are maintained in the bank due to digital transformation. In this quarter, the Bank increased its net fee and commission income to TL 6.1 billion, with an increase of 9 percent on a quarterly basis. The annual increase in net fees and commissions was 106 percent. On the other hand, operational expenses increased by 31 percent on a quarterly basis and by 127 percent on an annual basis.